Rice rivalry: India’s export ban grains optimism for Thai prices

The ongoing ban on white rice exports in India is bolstering the optimism of local shippers that Thai rice prices will remain relatively high during the first half of this year. Chookiat Ophaswongse, the honorary president of the Thai Rice Exporters Association, expressed that global market prices are likely to stay around US$600 per tonne, a rate not seen in over a decade, due to robust demand from numerous countries.

Chookiat also foresees a continuation of rice imports by Indonesia this year, although the quantity may be lower than last year, where nearly four million tonnes were imported from several nations, including Thailand, Vietnam, Pakistan, and Myanmar.

Last year, rice exports likely reached a total of 8.8-8.9 million tonnes, thus exceeding the earlier projection of 8.5 million tonnes. This was attributed to the increase in prices, which led to an estimated value of 180 billion baht (US$5 billion).

In November 2022, rice exports scaled up to one million tonnes, valued at 23 billion baht (US$658 million). This marked a 19.9% increase in volume and a 23.3% increase in value compared to October 2022.

This surge was due to increased exports of white and hom mali fragrant rice, as primary importers accelerated their imports to counterbalance the reduced domestic supply amid soaring global rice prices, particularly for white rice, which reached a 15-year high, reported Bangkok Post.

The association predicts that last month’s rice export volume was around 900,000 tonnes. This is due to exporters’ commitment to deliver a substantial quantity of rice this month, coupled with significant demand from key importers in Asia such as Indonesia, Malaysia, the Philippines, and Japan.

Reduced production

Moreover, major markets in Africa, the Middle East, and the Americas are also expected to demonstrate strong demand for white rice, glutinous rice, and fragrant rice. This is to compensate for reduced production in these countries and to build reserves for the first quarter of 2024.

Chookiat reassured that Thailand’s rice supply remains sufficient and the price of Thai rice remains competitive, which leads importers to choose the local grain.

As of December 27 last year, the price of Thai white rice 5% was quoted at US$659 (23,032 baht) per tonne, while the prices from Vietnam and Pakistan were in the range of US$653-657 (22,822-22,962 baht) and US$593-597 (20,725-20,865 baht) per tonne, respectively.

The association anticipates Thailand shipping around 7.5 million tonnes this year. This is because India may lift its ban on rice exports in the second half of the year. However, the potential impact of the El Niño weather phenomenon on global rice production remains uncertain and will be monitored this year.

The latest data from the Customs Department shows that for the first 11 months of 2023, Thailand exported 7.95 million tonnes of rice valued at 160 billion baht (US$4.61 billion), marking a 14.7% increase in volume and a 28.9% increase in value year-on-year.

In related news, the Internal Trade Department is reviewing a potential rise in boxed milk prices to help dairy farmers amid increased raw milk production costs. Import costs for raw materials have risen due to the Houthi attacks, impacting freight rates for fertilizers and steel. However, product prices, including rice paddy and tapioca, remain stable.